TMI Blog2021 (7) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... , the gold bar has foreign markings and is an imported gold bar. The serial number on the gold bar was seen hammered / tampered. Such serial number helps the Customs authorities to trace whether the gold bar has suffered Customs duty. The serial number having been defaced and tampered would raise a strong inference that it is smuggled gold. Further, the serial number is not mentioned in any of the invoices - there is no explanation why VAT was collected as per invoice instead of CST. Sri Sunil Cherian of Kerala Fashion Jewellery has not able to explain why the serial number on the gold bar is seen tampered. It is also stated by him that he has not sold any gold bar with tampered serial number. Though this invoice is issued to Venus Creation, Kolkata, Sri Sunil Cherian says that he handed over the gold bar to one Vimal. Sri Sunil Cherian has not been able to identify whether the gold bar is the same one sold by him as per invoice 875 on 21.12.2016. The term smuggled goods‟ means goods of foreign origin and imported from abroad. In the present case, there is no dispute that the goods are of foreign origin. As already discussed, the defacing of serial number on the gold bar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived a parcel from one Sri Naveen who told him that it contained some artificial stones‟. The parcel was booked with Naveen as consignor and Sri Gopal, Kolkata as consignee by airway bill dated 26.12.2016. It was also stated by him that he did not obtain full address, ID proof of these people. 1.3 On receiving information about detaining the parcel on 27.12.2016, he and his staff along with Sri Naveen and his associate Sri D.P. Saini met the Manager of M/s. Indigo Cargo (Domestic Airlines), Chennai and requested to return the said parcel. But the Manager refused to return the parcel and asked them to produce supporting documents for the consignment. Thereafter, on the same day, he received an e-mail from the email ID of Sri Ravi Nakhat (Appellant in Appeal No. C/40195/2020). The mail was attached with a sales invoice dated 23.12.2016 issued by M/s. Venus Creations, Kolkata. He submitted the letter along with sales invoice to the Manager of M/s. Indigo Cargo (Domestic Airlines), Chennai. The documents were forwarded by airlines to the Customs authorities. 1.4 Based upon these documents and statements recorded, summons was issued to Sri Naveen who is working as a deliv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee such parcels to Sri Gopal at Kolkata. 1.8 Based on such statement, Sri Pintoo Kumar was called upon to explain his stand. In his statement dated 31.12.2016, he stated that his friend Sri Rishi of Kolkata was in Chennai on 26.12.2016 and on the same day Sri Rishi Nakhat gave a packet to him which had gold inside and told him to give it to one person whom he would tell later. Sri Rishi thereafter left to Tirupati. That as per Rishi‟s instructions he had called Sri D.P. Saini and had handed over the packet to Sri Naveen on 26.12.2016 itself. Statements of Sri Rishi Nakhat and Sri Ravi Nakhat were recorded in Kolkata. 1.9 It was stated by Sri Rishi Nakhat that his counsin Sri Ravi Prakash Nakhat had some liquid funds and wanted to make some investment. He purchased the gold bar from M/s. Kerala Fashion Jewellery, Mylapore, Chennai on 21.12.2016 on credit basis for ₹ 29,29,000/- as per Sale Invoice No. 875 dated 21.12.2016. He paid the amount for this gold bar later only on 13.1.2017 through RTGS. That the same gold bar was sold by him to his cousin Shr Ravi Nakhat on 23.12.2016 for ₹ 27,32,857/- as per Sale Invoice No. 003/VC/2016-17 issued in the name of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by M/s.Kerala Fashion Jewellery. For this reason the sale invoice issued by him (Venus Creation) was sent through email instead of sending the purchase invoice issued by M/s. Kerala Fashion Jewellery. It was also stated by him that he did not give any security / guarantee while purchasing the gold bar on credit basis. So also that he had not given any acknowledgement for the delivery of the gold bar to him. 1.12 Further investigations relating to the bank accounts of Venus Creation, Kolkata (Sri Rishi Nakhat), it was found that M/s. Venus Creation was having only ₹ 10.25 lakhs as bank balance in their accounts as on 21.12.2016. Over a period of six months, there was credit transaction of more than ₹ 5 lakhs, the second highest transaction being ₹ 3,37,590/-. Suddenly a huge amount of ₹ 20 lakhs was credited into this account on 13.1.2017 by one Sri Sajjan Kumar Jhunjhunwala. This was not supported by any sale or purchase entry in Annexure B of the VAT returns. Another book transaction on 13.1.2017 was found to be credited from Ravi Prakash Nakhat to the tune of ₹ 27,32,857/-. On the same day, M/s. Venus Creation made a payment of ₹ 29,29,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is being so, the allegation that the transaction is illegal and intended to cover up black money is without any basis. The gold bar has suffered applicable Customs duty when it was initially brought into India from foreign country. So also the view taken by the department that the gold bar is prohibited goods under section 2(33) of the Customs Act, 1962 is erroneous. When M/s.Kerala Fashion Jewellery as well as M/s. Venus Creation have stated that they have sold the gold bar, the department ought to have accepted the invoice produced by Ravi Nakhat. Though the serial number of the gold bar is seen tampered, the onus of such tampering cannot be vested upon the appellants. It is crystal clear that the investigation agency has tried to complicate the simple commercial transaction into illegal one by a story built up by them. The department could have asked M/s.Kerala Fashion Jewellery (supplier of the goods) to produce import documents as they are the importers (Para (x) of appeal grounds). The case law relied by the Commissioner (Appeals) to uphold the order passed by the original authority are not applicable to the facts of this case. 2.4 The ld. Counsel relied upon the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not match with the prevalent market price of gold on the given date. Though, it is contended that on 21.12.2016 vide Invoice No. 875,Sri Rishi Nakhat purchased the gold from M/s.Kerala Fashion Jewellery, the amount quoted is ₹ 29,29,000/- including tax. The rate of the gold prevalent on that day was around ₹ 27,68,090/- only. The only logic of mentioning such higher price in the invoice is for the reason that Sri Rishi Nakhat had to pay heavy premium for getting such an invoice. It defies all logic that anyone would come all the way from Kolkata to Chennai to purchase gold for higher amount of ₹ 1,31,910/- when he could have procured it from Kolkata at the market rate. This shows that the transaction price as per invoice is only an afterthought to cover up the fraud committed by them. The transaction is only a story concocted in an attempt to legalize the illegal black money cash transaction. If they had been successful in transporting the smuggled gold to Kolkata, there would not have been any invoice at all. 3.4 Even though the sale of the gold is claimed to have been made on 21.12.2016 by Kerala Fashion Jewellery to M/s.Venus Creation, the RTGS payment is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of jewellery of ₹ 27,32,857/- with tax of ₹ 27,058/-. Venus Creation has no license to sell gold bars to individuals. So sale of the gold bar to Ravi Nakhat on 23.12.2016 is shown as sale in form of jewellery in the ledger accounts of Venus Creation. All these would go to show that the claim made by the appellants that the gold was not smuggled and was purchased by proper invoice to be false and untrue. It is also argued by the ld. Counsel that due to tampering of the serial number on the gold bar, it cannot be ascertained whether the gold has suffered Customs duty. This would lead to the conclusion that the gold is smuggled. Further, since the accounting of the same is shown in the ledger accounts of Venus Creation as jewellery, the appellants have no right to claim ownership / redemption of the goods. He prayed that the appeals may be dismissed. 4. Heard both sides and perused the records. 5.1 At the outset, it has to be stated that there is no dispute that the parcel was mis-declared. Although the appellants knew that the parcel contained gold bar, they did not give proper instructions to declare the goods correctly before the Customs authorities. So also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 for ₹ 27,32,857/-. However, this gold bar is seen purchased by Venus Creation from Kerala Fashion Jewellery two days before on 21.12.2016 for ₹ 29,29,000/-. Why should a person in Kolkata take the effort of purchasing gold bar from Chennai for ₹ 29,29,000/- and then sell it after two days at a lesser price of ₹ 27,32,875/-? The market study by the department of the gold rate prevailing on these dates indicates that the price of gold on 21.12.2016 was around ₹ 27,68,090/-. This being so, the logic behind the purchase of gold for a price of ₹ 29,29,000/- from Kerala Fashion Jewellery and the sale of it for a reduced rate to Sri Ravi Nakath is only so as to as include the heavy premium paid to M/s. Kerala Fashion Jewellery for getting the invoice after investigation started. The invoice has to be from Chennai as the gold was booked from Chennai. 5.6 Again, Sri Ravi Nakath stated that he had some liquid funds with him and wanted to make an investment for which he decided to purchase gold from his cousin Sri Rishi. On verification of the accounts of Sri Ravi Nakath, it is seen that he had only ₹ 48,953/- as cash balance in his account. Late ..... X X X X Extracts X X X X X X X X Extracts X X X X
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